Many companies and organizations are continuing to look for ways to reduce their internal cost of operations and overhead. Implementing LEAN manufacturing principles has become a very important concept and one that may help improve overall efficiency of operations, directly impacting bottom line results. This blog is written for those organizations.

11/03/2016

The Intersection of Lean Manufacturing and Project Management

Lean manufacturing has become a popular way to eliminate waste, reduce costs and improve efficiencies. This philosophy originated, largely, at Toyota and is used to better align customer needs with manufacturing operations.

The challenge with lean is that, despite its attraction to many executives who want to cut costs and increase productivity, a lean process doesn’t happen overnight. There are plenty of obstacles to overcome—obstacles that are almost identical to the challenges of implementing projects successfully.

Even though lean and projects have these implementation challenges in common, my clients waste quite a bit of effort debating whether lean and project management can work together, or whether they’re at odds with one another. Of course, this conversation goes against the point of lean—to eliminate unnecessary waste—yet it occurs frequently. After 25 years of leading manufacturing operations, implementing lean principles and conducting hundreds of projects, I can assure you that the opposite is true:

Lean is supported by the basic tenants of project management.

The intersection point: a vast opportunity!

There is a point of intersection for lean and project management that will deliver substantial bottom line business results—growth, profit, cash and margin. But there has to be a level of commitment for this to work. Lean requires continuous, short spurts of excellence in execution and focus to accomplish results. To achieve this goal, you need resources, team involvement and collaborative goals. The reality is that most lean programs fail as executives lose interest.

Instead of creating these lean execution systems from scratch and letting the excitement wear out before meaningful success, the most successful organizations leverage an already-existing base that springs from project management fundamentals. Strangely enough, teams rarely follow this path because they think that lean and project management cannot play in the same sandbox. Those companies are losing out on a vast opportunity!

How do you take advantage of this opportunity? By knowing when lean and project management approaches work together, rather than in opposition. Here are four examples of how lean manufacturing principles and project management approaches intersect, and make your process faster and better:

1. Focus on the customer

One of the most important aspects of lean is the focus on the customer. Instead of creating elaborate systems to figure out demand, the idea is to find the most direct route to the customer and pull the demand. Here, “customer” doesn’t necessarily mean the end-user customer; lean principles view the customer as the next person to receive your work. Your customer can also be the person on the line if you’re a support role to the line (thereby including management). In other words, focusing on the customer can flip thinking upside down.

My most successful projects followed this same rule. When following the critical path, you should be thinking of what your customer (next person on the critical path) needs and when they need it by. Ask yourself: “What can I do to provide value within this critical path and how can I make sure work continues to move (flow) through the critical path?” These are project management principles.

2. Focus on value

Another of the key tenets of lean is the focus on value. Instead of getting caught up in non-value added yet wildly popular fads of the time, the idea is to focus on what will create value. Actually, lean manufacturing in itself is sometimes viewed as a fad. For example, I’ve had clients who want to implement lean principles, and at least 60 percent of the time these executives see it as a quick fix: Coordinate a few kaizen events, and the company will be in great shape. This is never a successful strategy!

Project management is the same. Spending days on project charters, complicated project plans and different resource task lists is useless if value is not at the crux of the plan. In project management, the key is to focus on the critical path. The critical path will align with those tasks providing value that will add up and achieve your end objective. Following the critical path aligns with how to implement the future state value stream map.

3. Be more Agile

Agile is at the intersection of lean and project management. An Agile approach allows you to break down lengthier projects with complex components into reasonable chunks. Agile yields a quicker process, as you’ll gain rapid feedback on the first chunk of work (which could relate to a milestone), rather than waiting to the very end and making complicated changes to the finished product. With Agile, you can incorporate continuous feedback into each chunk of work, or sprint, so that you continually improve the process as you go along.

In lean manufacturing, this same principle applies as you perform a kaizen event. The objective is to have a reasonable and achievable amount of work that will provide an end result that aligns with a step towards your end objective within a short period of time, typically a week. Once you perform the first chunk, you incorporate feedback and lessons learn into the next chunk. As chunks are added, layers of complexity are achieved. The bottom line is that smaller batch sizes of work are performed in an iterative fashion for the most successful lean and Agile approaches.

4. Give projects visibility

Lean manufacturing programs are known for making the process and associated metrics visible. For example, an aerospace manufacturer client I worked with had lead times of 6 -13 weeks involving several operations. It was complicated but critical to know if they were behind schedule long before the item didn’t ship on time and showed on a past due list. Thus, we chunked the work load into smaller buckets and hung work order packets on the wall by the machine or machine group. This provided visibility into whether a certain group of machines were getting overloaded. We also put problem orders into a separate section so they were immediately visible to everyone. Last but not least, we started showing the age of the work orders with color coding. This enabled us to manage work orders successfully.

The same is critical in project management. I’ve worked on countless project plans with hundreds of pages. Who can keep track of all that complexity (similar to the piles of work orders at my client)? Thus, my most successful clients have found a way to communicate project progress in relatively equal chunks of work with clear progress towards objectives in a visual way.

Often, this is supported by a project management tool with visibility into schedule. The result is a clear picture of a simple timeline with critical milestones in weekly or monthly buckets—and effectively show progress visually. Tasks that are ahead of schedule or behind schedule pop out immediately so that action can be taken. And, importantly, tasks that have been idle (no progress for a period of time) can be color coded so they’ll emerge and be visible.

A strong partnership for projects

Using lean and project management approaches together can take your production process to the next level. Instead of wasting time debating whether these two approaches can work together, look for the common elements. I see lean as uncommon common sense. And, in my experience, the most successful projects also followed uncommon common sense. If you focus on putting the best of both of these methodologies together (customer, value, Agile and visibility), business-winning results will follow.

This post was written by Lisa Anderson. Ms. Anderson is the President of LMA Consulting Group, Inc. Ms. Anderson can be reached at 909-630-3943 of landerson@lma-consultinggroup.com. To learn more about the fundamentals of LEAN, please also contact the LEAN Accountants of McKonly & Asbury.